On August 31, 2007, the AFL-CIO and other labor advocates obtained a Temporary Restraining Order against the Department of Homeland Security (DHS), U.S. Immigration and Customs Enforcement (ICE), and the Social Security Administration (SSA). This order has delayed the September 14, 2007 implementation of the biggest anti-employer regulations to impact U.S. businesses in over 20 years.
I-9s
The immigration Reform and Control Act of 1986 (IRCA) compelled employers to verify the identity and work authorization of all individuals hired after November 6, 1986. A form I-9 is now routinely presented to new hires, along with Form W-4, requesting income, tax withholding information and Social Security numbers, insurance plan enrollment forms, employee handbooks, and confidentiality agreements.
Over the past 20 years, employers have generally complied with the I-9 process. In the late 1980s, friendly Immigration and Naturalization Service (INS) personnel paid educational visits to employers to explain the verification process. Civil penalties and criminal prosecutions were rare. The Office of Special Counsel for Unfair Immigration-Related Employment Discrimination was established to help employers get prospective employees through the I-9 process if there were any documents available to satisfy the I-9 criteria. Raids on notorious employers of undocumented foreign laborers were sporadic. Employers were also repeatedly assured that they were not to be detectives. It was never the employer’s duty to look behind the forms presented. A Lawful Permanent Resident card, colloquially called a “green card,” might be an unfamiliar color—but no research or questioning was required.
No-Match Letters
Employers issue forms W-2 each January, and copies are sent to the SSA. The SSA reviews the data, and the amount of withholding taxes appearing on the W-2 is credited to the employee. As the number of unauthorized workers in the U.S. has grown, the number of Social Security numbers reported on W-2s that are bogus, or are issued to persons other than the name shown on the W-2, has risen dramatically. The monies withheld from employee wages that are “no-match” are put in the SSA Earnings Suspense Account. It now contains over $500 billion. The SSA is not authorized to transfer the “no-match” monies to the funds used to pay Social Security benefits. Unauthorized workers who have contributed to the SSA for years get no benefits.
In an effort to reduce the monies in the SSA suspense account, the SSA started issuing no-match letters to employers in 1994. Employers were encouraged to correct transposed digits and ask employees to go to the SSA to clear up any discrepancy. In order to avoid claims of unfair-immigration related employment discrimination, the no-match letters even cautioned that “employers cannot ‘take any adverse action against an employee’ based solely on a no-match letter.” As a practical matter, we counseled clients on how to react to a no-match letters, which was to give copies to the employees and ask them to correct their SSNs with the SSA. The no-match letters did not require the employer to actually respond to the SSA. It has always been the case that employers who knowingly filed a W-2 with a bogus SSN could be criminally charged with filing a false information return with the Internal Review Service. However, the risk of sanctions was virtually nonexistent. As a practical matter, few employees lost their jobs over a no-match letter.
In June 2006, DHS published proposed regulations to create a “safe harbor.” The proposed regulations were designed to change the “No-Match” letter into an ICE enforcement mechanism. The regulations, which were to have gone into effect on September 14, 2007, are designed to compel employers to cleanse their work force of any and all unauthorized workers. Under the guise of a “safe harbor” program, SSA “No-Match” letters were to be accompanied by ICE warning letters. The bottom line: If an employer continues to employ an individual who lacks a valid SSN after 90 days of receipt of the No-Match letter the employer risks liability for violating the law, including civil penalties of up to $2,000 per alien, criminal prosecution with fines, and the risk of six months’ imprisonment.
When the injunction is lifted, there will still be a vigorous ICE enforcement program. While alien advocates see the temporary injunction as a victory, it will be short-lived. Unauthorized workers only have a limited respite. Employers have to immediately implement a program to protect themselves and their workforces. This is a major undertaking:
1. Completely audit Forms I-9 and re-verify any that show deficiencies or expired work authorization, and carefully apply the automatic extensions or work authorizations to the employees who are participating in the Temporary Protected Status (TPS) program. Discard Forms I-9s that are beyond the required retention period.
2. Recognize that ICE can come on 3-days notice to inspect Forms I-9, and in certain cases, come with no warning and a search warrant. Make sure that Forms I-9 are kept separate from personnel records and keep a copy in case the originals are seized.
3. Consider that Forms I-9s contain confidential employee personal data, and if any means of electronic retention are utilized, make sure access is limited and privacy laws are reviewed.
4. Make sure Public Access Files required by the Department of Labor are in full compliance with respect to the Labor Condition Applications, which are an integral part of the H-1B (specialty occupation) visa program.
5. Confirm from Forms W-2s that all H-1B workers are paid the actual wage set forth on the LCA. Rectify any shortfalls proactively.
6. Employers must be prepared for government “visits” and raids. Employers must understand their rights, including asking for agent identification, calling immigration attorneys, dismissing all nonessential employees, refraining from volunteering data and documents to the extent possible, and informing employees of their rights. The “fire drill” needs to be formulated before any workplace visit to minimize the disruption of business and arrest of employees.
7. Employees are aware of increased ICE enforcement attention. The “fire drill” for employees must be run as quickly as possible. If the workforce is bilingual, information on employee rights should be transmitted in all appropriate languages. Employers cannot advise or instruct an employee not to speak with a government investigator. However, the employer should have independent attorneys available, at the employer’s expense and identified in advance by the employer, who can counsel employees on their rights.
Conclusion
We expect a full court press by ICE in coordination with other agencies. Although there will be high profile raids, like those on meat packers, all employers with factories, warehouses, and large workforces can expect an inspection. The temporary injunction gives employers time to prepare an action plan.
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